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The stock of Videocon Industries surged 4 per cent accompanied by extraordinary volumes breaking an immediate resistance at ₹160 on Monday. This gives a buying opportunity to traders with a short-term perspective. Following a medium-term downtrend from the June peak of ₹211, the stock found support at ₹155 in the previous week. Triggered by positive divergence in the daily relative strength index and moving average convergence divergence indicator, the stock subsequently reversed direction and started to move higher. The stock’s recent rally has conclusively breached its 21- and 50-day moving averages.
The daily RSI has entered the bullish zone and weekly RSI is moving higher in the neutral region. The moving average convergence divergence oscillator has signalled a buy. The stock can extend its rally and reach the price target of ₹172 and ₹176 levels. Buy the stock with a stop-loss at ₹162 levels.
(Note: The recommendations are based on technical analysis. There is risk of loss in trading.)
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